Wal-Mart discrimination case cannot really be a class action

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Dukes v. Wal-Mart, a case claiming job discrimination against at least 1.5 million women, reached the U.S. Supreme Court last week after the 9th Circuit Court of Appeals in San Francisco agreed, in a 6-5 vote, to permit the case to go forward as a single class action.

The media is portraying this as a dispute over how “large” a class action can be, but that is incorrect. There is nothing inherently wrong with a large class action. A class action is simply a procedural device meant to aggregate similar claims for purposes of efficiency.

One can even imagine an appropriate employment class action as large as Dukes. For example, if Wal-Mart had a nationwide policy that it would always pay women 20 percent less than men doing the same job, women would be equally affected by that policy and it would be a simple matter to try the case.

But the theory of the Dukes lawsuit is exactly the opposite — the plaintiffs claimed that Wal-Mart’s central office did not exercise enough authority over each of its 3,400 stores; each of the individual managers’ discretionary employment or promotion decisions, whether made by male or female managers, was on average discriminatory; and thus Wal-Mart was responsible for a policy that “fosters or facilitates” discrimination.

Wal-Mart says women have fewer management jobs because fewer women apply. Only an illegal quota would block such a legal theory if courts let it go forward.

One can quickly see why this does not work as a class action. In the words of professor Richard Epstein, the procedural tail is wagging the substantive dog. Discrimination laws permit Wal-Mart to defend itself by demonstrating that the challenged job decision was made for a reason other than sex.

For example, looking at named plaintiff Betty Dukes alone, we learn that she had a female manager and she was repeatedly disciplined for returning late from lunch breaks. Yet if a court ties together claims that are not alike, it will have trouble trying the case as a single class action — unless it pretends that the parts that are not alike are not part of the lawsuit. Wal-Mart is stripped of its defense because the individualized defense would be inconvenient to trying the case as a class action.

But that is precisely backward. If there are too many individualized issues to permit a defendant to defend itself adequately in a class action, that means the correct ruling is not to have a class action. If the Supreme Court rules in Wal-Mart’s favor later this year, it will not be to protect business, but to protect due process.Theodore H. Frank is an adjunct fellow at the Manhattan Institute Center for Legal Policy.